WeVote
Log In

Bill

Bill

SB 561

Relating to income tax subtractions for child care expenses; prescribing an effective date.

2025 Regular Session Introduced by Dick Anderson and 1 co-sponsor

Electric cooperatives may treat unclaimed, aged patronage credits as nonescheat and use them for internal or charitable purposes, while preserving future claim rights.

In committee upon adjournment.
0
WeVote Research Nonpartisan
Bill Summary · SB 561

Summary — SB 561 (Chapter 213, 2025)

Corporations and Associations — Electric Cooperatives — Nonescheat Capital Credits

Status: Approved by the Governor (Chapter 213).
Approved: April 22, 2025. Effective date: October 1, 2025.
Primary sponsors: Senators Hershey and Mautz. Cross-file: HB 227.

Purpose / Intent

SB 561 changes how certain unclaimed capital credits held by electric cooperatives are treated under Maryland law. It (1) prevents those specific credits from being treated as abandoned property subject to the State’s unclaimed property process, and (2) authorizes electric cooperatives to use unclaimed, aged credits for limited internal or charitable purposes — while preserving past members’ right to claim them.

Key provisions

  • Defines “nonescheat capital credits” (new Corporations & Associations §5‑650.1) as money that:
    • Is due to a past member in retirement of capital allocated on a patronage basis for amounts received/receivable in excess of operating costs and expenses since the cooperative’s incorporation in Maryland;
    • Has been retired for at least five years; and
    • Has not been claimed by the past member.
  • Amends Commercial Law §17‑304(g) to exempt nonescheat capital credits from the statutory presumption of abandonment (which generally presumes many intangible property items abandoned after three years).
  • Permits a cooperative to use nonescheat capital credits only to:
    • Assist members consistent with cooperative powers under §5‑607; or
    • Make donations to nonprofit, charitable organizations approved by the cooperative’s board.
  • Clarifies that the amendment does not relieve a cooperative of the obligation to refund these credits if a past member applies and claims them.

Who is affected

  • Electric cooperatives (administration and board decisions regarding aged, unclaimed patronage capital).
  • Past members of cooperatives (owners of the capital credits).
  • State Comptroller / Unclaimed Property Administrator and the Unclaimed Property Fund (administrative and revenue implications).
  • Charitable groups that might receive board‑approved donations from these funds.

Fiscal / policy impact

  • The Department of Legislative Services notes potential reductions in Unclaimed Property Fund (and thus general fund) revenue to the extent these credits would otherwise flow to the State as presumed abandoned property. The fiscal effect was not precisely quantified.
  • No direct change to cooperative obligations to repay credits on claim; only changes escheat/presumption rules and permissible uses for unclaimed funds.

Effective date & implementation

  • Enacted as Chapter 213; effective October 1, 2025.
  • Cooperatives retaining or re‑allocating such credits will need to follow the new statutory limits and maintain systems to refund claims from past members.

Compiled from official sources — confirm details with the bill’s official record.

Sign in to ask a question.